Following the successful IPO by Fattal Holdings (1998) Ltd. (TASE:FTAL) and the draft prospectuses published by fashion company Adika and shopping centers company Zim Centers, energy and infrastructure company Global Power, controlled by CEO Nissan Caspi and chairperson Ehud Ben-Shach, yesterday published a draft prospectus for a an IPO on the Tel Aviv Stock Exchange (TASE). "Globes" reported last week that the company was planning an offering.
Global Power, one of the controlling shareholders (a 23.4% stake) in the IPM power station slated for construction in Be'er Tuvia, is planning to raise NIS 60 million by offering a quarter of its shares to the public at a company value of NIS 190 million, before money. The planned IPO is believed to be scheduled by the end of March. A NIS 1.6 billion financing agreement for the IPM power station has been signed with a consortium of lenders, headed by German Deutsche Bank and Bank Hapoalim (TASE: POLI).
Poalim IBI Underwriting and Investments Ltd. (TASE:PIU) and the Shibolet & Co. law firm, which recently merged with the Raved, Magriso, Benkel & Co. firm, will lead the IPO. Global Power's management will probably begin a roadshow for investors on March 11, with the aim of completing the offering by the end of the month.
Focus on renewable and distributed energies
Global Power's draft prospectus shows that the company finished the first half of 2017 with NIS 3.6 million in revenue and a NIS 4.3 million loss. As of the end of June 2017, the company's equity was NIS 10 million, and it had only NIS 190,000 in cash. The salary costs of Ben-Shach and Caspi were NIS 1.7 million and NIS 390 million in the first half of 2017 and NIS 3 million and NIS 800,000 in all of 2016, respectively.
IPM is Global Power's main project (Ben-Shach is chairperson of IMP). Global Power also builds smaller power stations for production of electricity using natural gas in factories, kibbutzim, and industrial zones. Output at these power stations is in the 5-16 megawatt range. The company has nearly 30 power stations in various stages of construction at an average cost of NIS 15 million per station, which means that it will need to invest NIS 400 million in the next 4-5 years during which these projects will be carried out.
Global Power, founded in 1999, will build IPM together with partners Noy Infrastructure and Energy Investment Fund and Leumi Partners Ltd.. Besides Caspi and Ben-Shach, shareholders in IPM include Moti Ben-Moshe, Yitzhak Mirilashvili (through infrastructure fund Yesodot), former Israel Electric Corporation (IEC) (TASE: ELEC.B22) chairperson Moti Friedman, former Israel Securities Authority chairperson Moshe Tery, former MK Hagai Merom, Yoav Sarna, Morris Sabbagh, and private US investors.
The power station was first proposed in 2005, when Global Power combined forces with a group of private developers. A few years later, Shikun & Binui Holdings Ltd. (TASE: SKBN), controlled by Shari Arison, joined the group. Shikun & Binui became the dominant shareholder in the project, but decided to sell its share of the project in 2011. Several shareholders came and went before the current ownership was settled.
Global Power's website states, "Global Power is focusing on investments exclusively in distributed power projects, high efficiency, energy and renewable energy in sectors that include solar energy, biomass, and storage."
Construction costs for the Be'er Tuvia power station, which will be built and operated by German company Siemens, are estimated at NIS billion. The power station will produce 440-450 megawatts and provide 2.5% of Israel's electricity consumption. IPM believes that construction of the station will begin in the second quarter of this year, with electricity production at the station beginning in the second half of 2020.
IPM will use natural gas from the Leviathan and Tamar reservoirs in accordance with existing gas regulation in Israel. 85% of its production is slated for sale to IEC, and the remaining 15% will be sold in the private market.
Published by Globes [online], Israel Business News - www.globes-online.com - on March 1, 2018
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